Samsung Electronics' Q3 Operating Profit to Exceed 100 Trillion Won; Target Price at 460,000 Won

[Financial News] IBK Securities forecast that Samsung Electronics will post more than 100 trillion won in operating profit in the third quarter of this year despite the stronger won. It maintained its 'Buy' investment rating and target price of 460,000 won.
Kim Woon-ho, a research analyst at IBK Securities, projected in a report on the 2nd that Samsung Electronics' consolidated third-quarter revenue would rise 13.8% from the previous quarter to 195.23 trillion won. Operating profit was estimated at 101.661 trillion won, up 13.6%. The operating margin was expected to come in at 52.1%, down 0.1 percentage point from the previous quarter. Kim said, "The won-dollar exchange rate is believed to have acted as a key variable," adding, "Some performance incentives that were not paid in the second quarter are also likely to have been reflected in the third quarter."
The third-quarter earnings forecast was lowered from the previous estimate. IBK Securities cut its revenue and operating profit estimates by 5% and 12.8%, respectively. The Device Solutions Division, which oversees the semiconductor business, was projected to post revenue of 149.885 trillion won and operating profit of 101.842 trillion won. The Display Division was forecast to report revenue of 8.821 trillion won and operating profit of 894 billion won.
The MX and Networks Division was estimated to record revenue of 34.317 trillion won and an operating loss of 1.138 trillion won. The Visual Display (VD) and Home Appliances Division was also expected to post an operating loss of 264 billion won. Large-scale shareholder returns were forecast to support future gains in the share price.
IBK Securities estimated that Samsung Electronics' shareholder returns this year would total around 100 trillion won, with a substantial portion paid out as dividends. It estimated the company's capacity for share buybacks at approximately 20 trillion won.
Kim said, "Stable and sustained shareholder returns of this scale will provide an opportunity for the stock to be valued at a significantly higher level," adding, "Shareholder returns are expected to contribute to an increase in the stock's valuation."
The brokerage also assessed that Samsung Electronics' competitiveness in high-bandwidth memory (HBM) was improving. As High Bandwidth Memory 4 (HBM4) becomes the company's main product from the second half of this year, its share within the HBM segment is expected to rise from approximately 40% in the third quarter to more than 60% in the fourth quarter.
Kim said, "The price of HBM4 for 2027 was recently finalized, making it possible to secure DRAM-level profitability," adding, "HBM, which had weighed on profitability, is expected to become a factor driving operating-profit improvement starting with shipments in 2027." He continued, "As the memory supply shortage persists, profitability will remain at its current level and earnings will grow steadily," and added, "Samsung Electronics is in a significantly undervalued range."

[email protected] Lee Jung-hwa Reporter